Karnalyte Resources Inc. Announces 2021 First Quarter Results
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SASKATOON, SK, May 14, 2021 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Company") (TSX: KRN) today announced its financial results and corporate highlights for the first quarter ended March 31, 2021.
During the first quarter of 2021, the Company focused on the activities surrounding the strategic review that was initiated in 2020 including analysis, valuation and market sounding activities for the Wynyard Potash Project, review and analysis of the proposed nitrogen project (the "Proteos Nitrogen Project"), and external/independent review of the pre-feasibility study completed internally with assistance from the Company's strategic partner, Gujarat State Fertilizers and Chemicals ("GSFC").
The Company has been in contact with multiple potential partners for the Wynyard Potash Project. The Company has also been in contact with several potential partners for the Proteos Nitrogen Project. Discussions with these potential partners are ongoing. Management expects to provide an update as to these discussions and the conclusions of the strategic review in the coming weeks.
POTASH - MARKET UPDATE
The agricultural industry is showing strength worldwide, with strong crop prices increasing demand for fertilizer. The supply/demand gap for potash appears to be tightening as signalled by recent modest price increases. Overall, the prospects for increases in potash prices are positive given these factors and an overall positive outlook for commodities. The Company continues to closely monitor the global market conditions for potash.
NITROGEN – MARKET UPDATE
With respect to nitrogen, strength in the agricultural industry worldwide, strong crop prices and the resulting affordability of fertilizer to growers coupled with some global production outages has resulted in significant increases to nitrogen prices. The Company continues to monitor the market conditions for nitrogen fertilizer.
OUTLOOK FOR 2021
During the second quarter of 2021, the Company plans to complete the strategic review that was initiated in 2020 and solidify a strategic direction for the Company. The Company expects to announce the results of this over the coming weeks. It will also be necessary in 2021 for the Company to spend time and financial resources in dealing with various court actions commenced against it.
2021 FIRST QUARTER RESULTS
At March 31, 2021, the Company had cash of $3.3 million and positive net working capital of $3.1 million and no debt. The Company has adequate cash to fund any existing commitments in 2021 as well as to meet short term operating and capital requirements. The Company is considering strategic alternatives as the ability of the Company to continue as a going concern will require further equity issuances or other forms of financings. Karnalyte's First Quarter 2021 Financial Statements and Managements' Discussion and Analysis are available at www.sedar.com and on Karnalyte's website at www.karnalyte.com.
The following information has been summarised from the Company's Condensed Interim Unaudited Financial Statements.
March 31, 2021 |
March 31, 2020 |
|
Total revenue |
- |
- |
Net and comprehensive loss |
(577) |
(483) |
Basic and diluted per share |
(0.01) |
(0.01) |
Total current assets |
4,177 |
7,647 |
Total assets |
10,110 |
13,442 |
Total liabilities |
2,748 |
2,595 |
Total shareholders' equity |
7,362 |
10,847 |
ABOUT KARNALYTE RESOURCES INC.
Karnalyte Resources Inc. is a development stage company focused on two fertilizer products, potash and nitrogen, to be produced and manufactured in Saskatchewan. Karnalyte owns the construction ready Wynyard Potash Project, with planned phase 1 production of 625,000 tonnes per year ("TPY") of high grade granular potash, and two subsequent phases of 750,000 TPY each, taking total production up to 2.125 million TPY. Karnalyte is also exploring the development of the Proteos Nitrogen Project, which is a proposed small-scale nitrogen fertilizer plant with a nameplate production capacity of approximately 700 metric tonnes per day ("MTPD") of ammonia and approximately 1,200 MTPD of urea, and a target customer market of independent fertilizer wholesalers in Central Saskatchewan.
ABOUT THE WYNYARD POTASH PROJECT
The Wynyard Potash Project is a construction ready solution mining potash project located in Wynyard, Saskatchewan, with planned phase 1 production of 625,000 TPY of high grade granular potash, and two subsequent phases of 750,000 TPY each, taking total production up to 2.125 million TPY. All environmental permits remain valid, preliminary detailed engineering is complete, and the existing offtake agreement with Gujarat State Fertilizers & Chemicals Limited remains in effect. Further development is dependent on improved potash prices and obtaining financing.
ABOUT THE PROTEOS NITROGEN PROJECT
The Proteos Nitrogen Project is an advanced stage development project consisting of a proposed small-scale nitrogen fertilizer plant to be located in Central Saskatchewan, having a nameplate production capacity of approximately 700 MTPD of ammonia and approximately 1,200 MTPD of urea, and designed to produce two products – anhydrous ammonia (82-0-0) and granular urea (46-0-0). Karnalyte's primary target market is independent local Saskatchewan fertilizer wholesalers within a 400-kilometer radius of Saskatoon, Saskatchewan. A secondary target market is the US Midwest fertilizer wholesalers near to the Canadian – United States border. The proposed plant would be the first greenfield nitrogen fertilizer plant built in Canada in the last 26 years.
ABOUT GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
Gujarat State Fertilizers & Chemicals Limited ("GSFC") is a leading Indian Fortune 500 chemicals and fertilizer company that has been in business for more than 50 years. GSFC currently operates one ammonia plant that was commissioned in the year 2000, and two urea plants that were established in 1969, at its fertilizer production complex in Vadodara, Gujarat State, India.
As the Company's strategic partner and single largest shareholder, GSFC remains committed to the Company and the Wynyard Potash Project, and is fully supportive of the Company pursuing the development of the Proteos Nitrogen Project. GSFC has also confirmed to the Company that it will continue to support the structuring of the most cost-effective financing package for the development of the Wynyard Potash Project, as GSFC has consistently offered to the Company since becoming a shareholder in 2013.
FORWARD-LOOKING STATEMENTS
Certain information included in this press release is forward-looking, within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "could", "estimate", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar words or phrases suggesting future outcomes or language suggesting an outlook.
The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Karnalyte, including, without limitation, assumptions as to: projected economics for the Company's planned potash production facility, the confirmation in an independent feasibility study of Karnalyte's assumptions regarding the technical and economic viability of the Proteos Nitrogen project, the ability of Karnalyte to obtain financing on terms favourable to the Company, and the ability of Karnalyte to receive, in a timely manner, the necessary approvals from the Company's board of directors, shareholders, regulatory authorities, and other third parties.
Karnalyte believes the expectations and assumptions upon which the forward-looking information is based are reasonable. However, no assurance can be given that these assumptions and expectations will prove to be correct. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Without limiting the generality of the foregoing, readers are cautioned that the Company has not received a feasibility study prepared by a third party with respect to the Proteos Nitrogen project.
Actual results may vary from the forward-looking information presented in this press release, and such variations could be material. Risk factors and uncertainties could cause actual results to vary from the forward-looking information in this press release. Additional information on forward-looking statements and other factors that could affect Karnalyte's operations and financial results are included in documents on file with Canadian securities regulatory authorities and may be accessed through the Company's profile on the SEDAR website (www.sedar.com).
These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company assumes no obligation to update or revise them to reflect new events or circumstances.
SOURCE Karnalyte Resources Inc.
Danielle Favreau, Interim CEO, Karnalyte Resources Inc., 1(306) 986-1486, [email protected], www.karnalyte.com
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